theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and … countercyclical earnings risk (i.e., rather than having all households fare slightly worse than normal during recessions, we ensure … bankruptcy risk discouraging households from using credit. This finding contradicts the intuition that access to credit helps …

scale economies using two production models. The standard risk-neutral model finds little evidence of scale economies. The … model using more general risk preferences and endogenous risk-taking finds large scale economies. The authors show that …

efficient risk-sharing, negatively correlated with relative consumptions across countries. This paper shows that a model with … international transmission of productivity shocks generate the observed degree of risk-sharing: one associated with an improvement … transmission pattern. These findings are at odds with the presumption that terms-of-trade movements foster international risk-pooling. …

We develop a model of banking industry dynamics to study the quantitative impact of capital requirements on bank risk …

their perceived risk. We develop a dynamic stochastic general equilibrium model with the aim of verifying how sensible this …

The Great Recession focused attention on large financial institutions and systemic risk. We investigate whether large … economies or too-big-to-fail subsidies. Estimating scale economies is made more complex by risk-taking. Better diversification … resulting from larger scale generates scale economies but also incentives to take more risk. When this additional risk …